The term economic system here refers to the laws and institutions in a nation that determine how people own economic resources, how they buy and sell them and how the production process makes use of them in providing goods and services.
The United States economic system is composed of individual people, businesses, labor organizations, and social institutions. Individuals play very big economic roles in the United System economic system, for example, they function as consumers, workers, savers, and investors.
These same people do vote on public policies and also for the political leaders who thereafter set policies that govern the United States economy.
The United States has a market economy whereby individual producers and consumers determine the type of goods and services produced and also determining the prices for those goods and services. Both small and big businesses lead to the growth of the United States economy.
Factors of production
There are four main factors of production that lead to the growth of the United States’ economic growth. They include;
Natural resources simply mean the resources that not man-made such as mountains, beautiful sceneries, water bodies, natural harbors, and fertile land.
This resource plays a very big role in the growth of the economy.
The fertile land, for example, is suitable for the growth of crops and hence these crops can be sold on the market and in that process, the economy grows.
The United States has large water bodies such as lakes, oceans and beautiful coastlines.
In these water bodies, fishing is done and the fish are processed then taken to the market. Also, the beautiful coastlines attract people from all over the world to come and feed their eyes hence leading to the growth of the economy.
Labor simply refers to work that people do daily. Any job whether supervising, transporting or any manual work is labor.
In the United States, out of the 270 million total population in the year 1998, about 138 million adults were working or actively looking for jobs.
This has really played a very big role in the growth of the economy in the country. When people are working, it means that after a certain period they will be paid.
The government will deduct a certain percentage of money as tax to help and improve infrastructure, health, and other needs.
Capital refers to the buildings, equipment, and other intermediate products that businesses use to make other goods and services.
Many entrepreneurs in the United States have big companies in the country. These companies do employ many people to work in it and through this process, the economy grows.
The United States economic system is simply composed of individual people and other people running different businesses. The economy is high in the US because of the large population and many resources compared to other countries.